| Thu 8 Nov 2007, 12:23 | | BAW/BAWP - Barloworld Limited - The proposed unbun |
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BAW BAWP
BAW
BAW/BAWP - Barloworld Limited - The proposed unbundling
Barloworld Limited
(Incorporated in the Republic of South Africa)
Registration number 1918/000095/06
Ordinary share code: BAW
ISIN: ZAE000026639
Preference share code: BAWP
ISIN: ZAE000026647
("Barloworld" or "the Company")
THE PROPOSED UNBUNDLING AND SEPARATE LISTING OF FREEWORLD COATINGS LIMITED
(PREVIOUSLY THE COATINGS DIVISION OF BARLOWORLD) ("COATINGS")
1. Introduction
Following deliberations by the Barloworld board, as well as shareholder
engagement, it was announced on 18 December 2006 that the Barloworld board would
continue to review the Barloworld structure and, in addition to the unbundling
of Pretoria Portland Cement Company Limited ("PPC"), further unbundlings or
disposals would follow in the future. In this regard, in the announcement dated
31 July 2007, following the announcements dated 18 December 2006, 25 January
2007 and 27 March 2007, published on the Securities Exchange News Service
("SENS"), Barloworld confirmed its intention to dispose of its interest in
Coatings through a distribution of the ordinary shares of Coatings held by
Barloworld to the Barloworld ordinary shareholders.
2. Rationale for the unbundling
The unbundling will have a number of benefits, including:
unlocking the value gap between Barloworld`s intrinsic value and its market
value; and
the creation of a more focused Barloworld Group.
3. The unbundling
Subject to the fulfilment of the conditions precedent as set out in paragraph 4
below, 203 843 388 Coatings ordinary shares ("the Coatings distribution
shares"), constituting all of the ordinary shares held by Barloworld in
Coatings, will be distributed to Barloworld ordinary shareholders recorded in
the register at the close of business on 7 December 2007 ("the Record Date"), in
the entitlement ratio of one Coatings ordinary share for every one Barloworld
ordinary share held by a Barloworld ordinary shareholder ("the entitlement
ratio"). The distribution will be undertaken in terms of section 90 of the
Companies Act, No. 61 of 1973 as amended and in accordance with section 46 of
the Income Tax Act, No. 58 of 1962, as amended.
4. Conditions precedent
The unbundling is subject to the fulfilment of the following conditions
precedent:
- the passing by the Barloworld ordinary shareholders at the general meeting of
the ordinary resolutions necessary to implement the unbundling to be held at
12h00 on Friday, 23 November 2007;
- the granting of an exemption, by the US Securities and Exchange Commission to
Coatings, from the registration and reporting requirements of section 12(g) of
the US Securities Exchange Act of 1934, as amended, in reliance with Rule 12g3-
2(b) thereunder; and
- the approval by the JSE Limited ("JSE")of the listing of the Coatings ordinary
shares on the JSE on the listing date, being Monday, 3 December 2007.
5. Salient dates and times
The salient dates and times of the unbundling and listing of Coatings
distribution shares are as follows:
2007
Last day for lodging of forms of proxy for
the general meeting by 12:00 on Wednesday, 21 November
General meeting of Barloworld shareholders at
12:00 on Friday, 23 November
Results of the general meeting released on
SENS on Friday, 23 November
Results of the general meeting published in
the press on Monday, 26 November
Last day to trade in Barloworld ordinary
shares on the JSE to participate in the
unbundling on Friday, 30 November
Barloworld ordinary shares trade ex the
entitlement to the Coatings distribution
shares on Monday, 3 December
Coatings ordinary shares commence trading
under the JSE share code FWD and
ISIN ZAE000109450 on Monday, 3 December
Record date to participate in the unbundling
on Friday, 7 December
Share certificates in respect of the ordinary shares of Coatings will be posted
by registered post to certificated Barloworld ordinary shareholders, at the risk
of the certificated Barloworld ordinary shareholders concerned, and
dematerialised Barloworld ordinary shareholders will have their accounts at the
CSDP or broker updated with the ordinary shares of Coatings on Monday, 10
December
Notes:
The abovementioned times and dates are South African times and dates and are
subject to change. Any such change will be released on SENS and published in
the press.
Barloworld ordinary shareholders may not dematerialise or re-materialise their
Barloworld ordinary shares between Monday, 3 December 2007 and Friday, 7
December 2007, both days inclusive.
6 Pro forma financial effects of the unbundling
The illustrative pro forma financial effects set out below have been prepared to
assist Barloworld ordinary shareholders to assess the impact of the unbundling
on the earnings per share ("EPS"), headline earnings per share ("HEPS") and net
asset value ("NAV") and tangible net asset value ("TNAV") per Barloworld
ordinary share. The material assumptions are set out in the notes following the
table, and include the payment of an indebtedness to Barloworld of an inter-
company amount of R900 million. Due to the nature of the pro forma financial
effects, they may not fairly present the Barloworld Group`s financial position
after the unbundling, nor the effect on the Barloworld Group`s future earnings.
The pro forma financial effects are the responsibility of the Barloworld board
and are provided for illustrative purposes only.
Impact on Barloworld
Barloworld Barloworld
after the after the
unbundling unbundling change
of PPC of %
Coatings
(cents) (cents)
EPS 3251 2742 (16)
HEPS 4041 3522 (13)
NAV per 5 0813 5 0964 0
Barloworld
ordinary
share
TNAV per 3 8863 3 9514 2
Barloworld
ordinary
share
Impact on Barloworld ordinary shareholders
Barloworld Barloworld Coatings Barloworld
after the after the earnings/ after the
unbundling unbundling value per unbundling
of PPC of Coatings Barloworld combined change
share %
(cents) (cents) (cents)
EPS 3251 2742 555 329 1
HEPS 4041 3522 555 407 1
NAV per 5 0813 5 0964 2716
Barlowor 5 367 6
ld
ordinary
share
TNAV per 3 8863 3 9514 2216
Barlowor 4 172 7
ld
ordinary
share
Notes:
1. The EPS and HEPS, as set out in the "Barloworld after the unbundling of
PPC" column of the table, have been extracted from the PPC unbundling circular,
are based on the results of the Barloworld Group for the six months ended 31
March 2007 and have been calculated based on a weighted average of 201 686 000
Barloworld ordinary shares in issue for the period to 31 March 2007.
2. The EPS and HEPS, as set out in the "Barloworld after the unbundling of
Coatings" column of the table, have been calculated on the earnings of
Barloworld excluding Coatings, based on a weighted average of 201 686 000
Barloworld ordinary shares in issue for the period to 31 March 2007.
3. The NAV and TNAV per Barloworld ordinary share, as set out in the
"Barloworld after the unbundling of PPC" column of the table, have been
extracted from the PPC unbundling circular and calculated based on 203 345 000
Barloworld ordinary shares in issue at 31 March 2007.
4. The NAV and TNAV per Barloworld ordinary share, as set out in the
"Barloworld after the unbundling of Coatings" column of the table, have been
calculated on the Balance Sheet of Barloworld excluding Coatings, based on 203
345 000 Barloworld ordinary shares in issue at 31 March 2007.
5. The EPS and HEPS, as set out in the "Coatings earnings/ value per
Barloworld share" column of the table, have been calculated on the reviewed
earnings of Coatings for the six months to 31 March 2007, based on a weighted
average of 201 686 000 Coatings shares and the entitlement ratio.
The NAV and TNAV, as set out in the "Coatings earnings/ value per Barloworld
share" column of the table, have been calculated on the reviewed balance sheet
of Coatings at 31 March 2007, based on 203 345 000 Coatings shares and the
entitlement ratio.
7. Directors` opinion and recommendation
The directors are of the opinion that the unbundling has a sound business
rationale and will be to the benefit of Barloworld ordinary shareholders and
recommend that Barloworld ordinary shareholders entitled to vote at the general
meeting vote in favor of the resolutions necessary to implement the unbundling.
The directors intend to vote their respective shares in Barloworld in favor of
the resolutions required to implement the unbundling.
8. General meeting
The general meeting of Barloworld shareholders will be held at the registered
office of Barloworld, 180 Katherine Street, Sandton, at 12:00 on Friday, 23
November 2007 to consider and, if deemed fit, pass, with or without
modification, the resolutions required in order to implement the unbundling.
9. Circular to shareholders
A circular, including the notice convening the general meeting, together with
the Coatings pre-listing statement, which documents contain full details of the
unbundling, is being posted to Barloworld shareholders today, 8 November 2007.
Copies of these documents will be available for inspection at the registered
office of Barloworld, 180 Katherine Street, Sandton, during normal office hours
from the date of issue of this circular up to and including the date of the
general meeting.
8 November 2007
Investment bank and transactional sponsor
Standard Bank
Sponsor
JP Morgan
Date: 08/11/2007 12:23:32 Produced by the JSE SENS Department.
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